Last ditch efforts are underway to help secure the pensions of thousands of House of Fraser workers.
Trustees are understood to be preparing to open discussions with leading insurance companies to try and prevent their pension scheme from falling into the Pension Pension Protection (PPF) lifeboat.
Well-placed sources are confident it can be kept out of the PPF, where workers face cuts to their pensions of up to 10pc, likely by an insurer buying it out on better terms.
House of Fraser, which slumped into administration on Friday, was immediately snapped up by Sports Direct owner Mike Ashley
The 10,000-member scheme is understood to have been well run with long-term investments that would be attractive to insurers.
It currently has a £20m surplus, although the cost of a buyout would likely be about £170m.
A pension insurance buyout involves the insurer taking on the promise to pay pension fund members, giving policyholders a guaranteed income stream.
House of Fraser went bust on Friday and was immediately snapped up by billionaire retail tycoon Mike Ashley, for £90m.
Ashley, who founded Sports Direct in 1982 and has a £2.4bn fortune, said: ‘This is a massive step forward and further enhances our strategy of elevation across the group.
‘We will do our best to keep as many stores open as possible. My ambition is to transform House of Fraser in to the Harrods of the High Street.’
The agreement removes an immediate threat to 17,000 jobs and is expected to result in fewer of House of Fraser’s 59 stores closing.
However, under the controversial arrangement, he is allowed to walk away from the Pension fund, fuelling criticism.
Mike Ashley, who also owns a third of Debenhams, snapped up House of Fraser for £90m
Unsecured creditors including pension funds will be left to share a token £600,000, it was reported this weekend.
Work and pensions committee chair Frank Field MP last week urged Ashley to take on the pension liabilities.
He called on the tycoon to learn from the BHS debacle, when Sir Philip Green sold the chain for £1 in 2015 and it went bust a year later, leaving 11,000 jobless and a pension deficit of £571m. Green has since agreed to put £363m back into the BHS pension schemes.
Last night the Pension Regulator said it was monitoring the situation at House of Fraser.
It has powers to take action if it thinks an individual or company has tried to avoid obligations to a pension scheme. but said it was too early to comment on House of Fraser.
Ashley’s future son-in-law Michael Murray, 28, is tipped to play a key role in the future of the business. He is ‘head of elevation’ at Ashley’s Sports Direct business.
Dalriada, independent trustees for the House of Fraser pension scheme, could not be reached for comment.
It said last week that as a minimum, members of the pension scheme will receive PPF compenstation levels.